reuters digital previously she was the global editor at large of reuters and the united states managing editor of the financial times she's also the author of the critically acclaimed book plutocrats the rise of the new global super rich and the fall of everyone else she joins me from our new york studios christian welcome great to be here and so nice to be a conversation with great minds well you know it's hard felt actually i measure i measure the quality of a book by how many pages i've dog eared marked up in your book is littered with posted notes and you start the book with the story of the party in new york city that was coincidentally at the at the kind of the peak of great riches among the the the robber barons of the robber baron era and also at the tail end of the longest depression in american history two facts that i think most americans don't know can you tell us a story about that party and the how and what its impact was well this is the

bradley martin ball and i'm glad that you're singling it out because i agree with you that you know the nineteenth century is not so far away from what we've forgotten a lot about it here is what was really significant about it i think first of all that it came at the tail end of the long depression we think of the great depression as sort of the final gaffe of this sort of a long run of nineteenth century sort of overly turbulent capitalist development but actually a period i think of even greater misery was this long depression in the nineteenth century a time when really you know the years of industrialization started to grind you know very painfully the bradley martin ball was i think a manifestation of some of that grinding.

christian can you hear me. ok your mike has just died so i don't think you have to do anything but somebody in new york has to do something if there it is it's back ok i can no i can continue i'm sorry i missed your last sentence or two ok sorry to everyone there so what i was saying is you know then as now you had in the nineteenth century in this period of the long depression you had a lot of losers from the very turbulent economic changes of that time hence long depression but at the same time then as now you have some people who were winning who were doing extremely well and they were doing so well that they decided to really kind of shocking when you think about how the country was doing to hold this extremely extract again paul called the bradley martin ball it was the most fabulous most expensive entertainment america had ever seen now they argued that

actually this was a good thing because they were going to stimulate consumption and spending spending on their own ball public opinion decided otherwise and the reaction was so hostile that the martens actually left the country and moved to their vast rented state in scotland and this. was kind of the kicking off of the progressive era in many ways was it not and a lot of legislation in changes in tax policy absolutely so it came at this moment you know when people you know i find the parallels with today absolutely striking that on the one hand everyone could see that industrialization was tremendously positive that you know machines were able to deal with things that it had taken hundreds of human beings to do before and that you know all of a sudden you know the economy was really getting going but i. at the same time as

the long depression really showed people there was a lot of social and economic dislocation and to simply let the forces of capitalism sort of by themselves run things was not going to be sufficient and so really in the late mid to late nineteenth century americans and that there was a similar moment in europe people said wait a minute we like industrialization we like miss chines we like modern industrial capitalism but we are going to have to make a very big social and political accommodation and we are going to have to regulate we're going to have to rein things in we're going to have to empower the workers through unions and between unionization i mean back if it was eight hundred eighty one wasn't the sherman antitrust act was was introduced and the question is you know i i've had a number of libertarians come on the program and they and that you say what's that you know what would you like america to look like and they say well we did during

the gilded age you know the roar you know the eighty eight hundred eighty s. and yet grover cleveland eight hundred eighty seven i think it is the state of the union address talked about the irony yield of corporate you know on the on the neck of the average worker this was a time of change. tyco and stanley cuz loves him i remember his name right you know there's this is a taurus party where is the modern day bradley ball where is the modern day version of that or has it not yet happened or you know will it one of the parables years well in my book you know the fancy party that i describe as the modern day equivalent is a party that was it was held to celebrate the sixtieth birthday of steve swartz and the co-founder of the private equity group blackstone and that was also you know some fabulous party rod stewart allegedly paid. huge amounts of money to sing at

the party etc and again that was held just before two thousand and eight before the financial crisis at the sort of the peak of the boom years. like the martens steve schwarzman suffered in terms of public opinion for it you know people people decided that he was. or the overly ostentatious face of this sort of turbo charged financial capitalism was it in your books that i read that people in was part of that organization yet the peterson is the co-founders of blackstone was co-founded by shorts and peterson and and you know by the way like i think that both of them are very very able businessmen and i think they founded a very very effective private equity firm i think that you know the fact that steve schwarzman the party became symbolic of you know sort of the fabulous wealth generated in this era in a way it is less about schwartzman and blackstone and more about the phenomenon

that i do well on in my book which is you know as in the nineteenth century we're living in this time of tremendous economic change and overall i actually think that it is benign i'm in favor of the technology revolution i'm in favor of globalization but i think we do need to pull back and really face the fact that there are some winners the not just the one percent but the zero point one percent the zero point zero one percent those of the very very top are doing extremely well and there are also some losers and the biggest losers are the people in the middle class in the western industrialized countries who are facing tremendous sustained and i think continuing downward pressure on their incomes as in the one nine hundred century i think it's going to require a very significant social and political accommodation the invention of new

institutions to make twenty first century capitalism work for the middle class well in the in the eighty's there was the never just stop monopoly and it didn't really get aggressive until teddy roosevelt's administration and even the taft who followed him i think ultimately broke up standard oil and. so you know it took a generation. or so. ronald reagan in the first or second year of his presidency functionally stopped the justice department from enforcing the sherman antitrust act or its errors which led to this explosion of mergers and acquisitions this whole brand new phrase m.n.a. artists the michael milken of the world and korea and change changes in the tax law that went along with that created the possibility of companies like bain even existing which would not you know their business model just what was would have been possible prior to the night prior to the reagan administration is is it possible that we're seeing the that were that were kind of pre response i mean i

haven't seen anybody come out and say let's start enforcing the sherman antitrust act in fact the the f.c.c. right now is talking about you know allowing greater media consolidation. while i agree with you tom sort of on two fronts first of all i think you're absolutely right to talk about reagan i think that you know the past thirty years which is the period when we have seen this extreme increase in income and equality you know my own view is it is driven chiefly by these very big economic transformations but hamilton had with those economic transformation has been a political revolution it has been you know a political revolution heralded by reagan and thatcher and that was a revolution about deregulation about liberalization about privatization about weakening unions about changing the culture around c.e.o. compensation all of those things came together and they exacerbated the impact

especially on income distribution of these economic forces now i actually think that that the financial crisis and obama's reelection in twenty twelve and what we're seeing in europe all are sort of coming together to a mail to the very beginnings. of a backlash of a standing back and certainly not denying is certainly not wanting to roll back either the technology revolution or globalization but sort of standing back and saying you know wait a minute the reality is capitalism in the twenty first century in the western industrialized is not working for the middle class and the statistics say that you know particularly in the united states middle class incomes have stagnated for the past decade think about that middle class has been treading water for ten years

that's a long time and the economy has been growing a lot in that period so i think people are starting to think about all of this in new ways but what is really striking for me is you know how hard it is for the political discourse to shift because i think that we've sort of been trained not to think in these sorts of structural terms we've been trained to think about the economy and about success or failure as just about us as personal you know should i retrain how do i build my career what sort of school should i send my kids to and it's been taboo to talk about class economic distribution structure of the economy and you know the with the with the great depression as it were and the great gilded age of the late nineteenth century that led to that progressive revolution in the one nine hundred ots but then in one nine hundred twenty the.

the getting his name the president the guy who ran for president but his his slogan was more more business and government less government in business and is a warren harding you know and so and you know you see at harding coolidge and hoover you know nine years of that led to the great crash are we. the teddy roosevelt point and we're going to have to go through the harding coolidge who are or are we a be maybe the beginning of the hoover point if we're drawing parallels here if we're drawing parallels i'm afraid i would say we're at the teddy roosevelt point i think that this is going to be a very very long political process and a long intellectual process you know i think i think that part of the difficulty that progressives that liberals have in grappling with what's happening in the world economy right now is i think they are able to ask the questions but they don't have persuasive answers yet it's really striking to me the extent to which

the liberal agenda the progressive agenda is really a rehashing of the one nine hundred fifty s. and i'm not saying i disagree with that and i'm certainly not saying i have something better to offer but when i look back on the historical experience what is very striking is the way the progressive came up with something entirely new well well well and we'll dig deeper into that in just a moment more of tonight's conversations with great minds the christian freeling after the break.

you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear see some other part of it and realize that everything you thought you knew you don't know i'm sorry is a big. here is mitt romney trying to figure out the name of that thing that many americans call a dollar. i'm sorry i'm just a guy who cares an awful lot about money you sir are a fool you know what kind of terrorist cells in your neighborhood all want to keep us safe to feature is

a monkey on the ball that kristen. can secure beliefs about it's. going to support you to distract us from what you and i should care about because they're profit driven industry that sells a sensationalistic garbage he calls it breaking news i mean martin and we're going to break that. if. problematic conversations three bines of chrystia freeland bush is currently the editor of thomson reuters digital and author of the critically acclaimed book plutocrats the rise of the new global super rich and the fall of everyone else i have to add i am reading i am finding it an absolutely amazing book. who is

leon cooperman and what does and you know and what does his story tell us or his opinion of president obama more specifically tell us about the very very rich at least cooperman is the founder of this successful billionaire founder of a hedge fund called omega and as a sort of part of the roll out of my folk i wrote a profile of him for the new yorker i chose to tell these stories because he. it was identified as he wrote a letter to the president which sort of went viral particularly among the super elite among the plutocrats in which he accused the president of waging class war and said that the president was hostile to capitalism hostile to the rich that that wasn't american and what was really interesting to me about this letter is the way

that mr kuperman really emphasized his own story which is an impressive story he is the son of a plumber from the bronx and he rose first of all to be a partner in goldman sachs and then to found his hedge fund so his argument to the president was you know i'm a self-made guy i tane from the working class and you the president shouldn't be hostile to me you should celebrate the success of people like me and is you know one of the arguments made against this level of wealth that was made back in the in the thirty's and forty's to justify raising the top income tax rates of ninety one percent and arguably back in the in the teens as well was. there to a certain extent the economy is a zero sum game that the more the rich get richer somebody else is going to have to get poorer that was he first of all what are your thoughts on that and and

and was he cognizant of that or rejecting that notion. what so first of all i actually personally don't think the economy is a zero sum game i think that it is possible and there have been times in economic history when you know the country has grown together an error that is often cited is that post-war era and i think part of the reason that in the sort of collective national memory that era of the fifty's the sixty's is bathed in such an awesome. it is if you look at the data it was a period when as one economist has put it america grew together so you can have a combination of you know you can have widely shared economic growth but i would agree with you tom that what we're seeing today the way we're seeing the economy work today is you know i see it as this corn with two very different sides the the same economic forces that are driving the rise of the plutocrats including in

particular you know a hedge fund billionaire like we could permit are also hollowing out the middle class are driving down middle class wages and in answer to the second part of your question no i certainly don't think that most of the plutocrats are willing to make that connection i think they still very much do believe partly because they want to believe in this idea of trickle down economics in this vision of themselves as we heard during the presidential election campaign as the job creators you know i'm curious did you have pursued the documentary client number nine about eliot spitzer . no i did not hear it just the core question he basically. p.o. did a billionaire who took him down you know arguably illegally and that's a documentary about that i'm curious if you've gotten any blowback if you're concerned about its. billionaires maybe out to get you. well certainly just to talk

about eliot spitzer because i do think that you know he acted with a lot of brave theory and it's certainly the case that a lot of people on wall street including you know quite liberal people people who have served in the cabinets of democratic presidents absolutely despise eliot spitzer so it's absolute the case there has been tremendous hostility there towards him in terms of need you know a few people have yelled at me have. i used words that were not so nice when i you know when i told my father about a few of the reactions my dad is a farmer in northern alberta and is quite you know a. he would i think himself call himself a redneck proudly and i told him he said all the tell me who that is you know i'm going to beat him up they can't talk to my daughter that way but you know on the other hand i have had some reactions which have surprised me in

a positive way so there was one guy who i quote in my book and goldman sachs executive and he sent me an e-mail and it said clue krauts in the subject line and i was i don't know if you ever get those emails that you're scared to open so i was kind of scared to open it but i did and he said actually that he found my book really interesting it had changed his perspective on things and he concluded by saying it made him want to move to sweden so i guess if the impact of my book can be to make goldman sachs partners feel like sweden has some things to recommend itself i'll be pleased that that sort of introspection though is probably rare i mean just in general it's where the. particularly in these circles assumes f. scott fitzgerald famously said you quote him in your book you know the. public paraphrase it badly but the very rich are different from you and me from the rest of us. so he did say that and what

kind of interesting is the difference is not the one that fitzgerald identified you know the rest of that quote he goes on to say essentially i'm paraphrasing like you that the rich are different because they're born with money they're born rich and that changes them what's interesting and i think actually central to the self identity of today's super rich is not all of them but quite a lot of them are people like leon kuperman they are the. working rich and they are at least to some degree self made now when i say self-made you know i don't want to lean on that to have believed if you wish to become a political hack it is wise to choose relatively affluent parents but you know they're self-made in the way of a mitt romney that yes you know ultimately grew up in a family that became extremely affluent but bain capital he didn't inherit he built

it himself as a need those so that's central to their identity but the other thing that's happening and i think this is a really big issue and a real problem in politics today is partly because of the globalized nature of the economy the super rich today increasingly are becoming a community a tribe unto themselves this sort of global group of super rich who hang out with one another do business with one another stay in the same hotels around the world and have increasingly little to do with the communities back home you know i read the part of your book and what struck me when you were talking about how they had basically become a country unto themselves you describe one one guy who had three passports three nations and he said i don't know what i'm a nation of you know what. what struck me is that this almost sounds like a description of you know late second millennium.

european aristocracy where all the royal families were cousins and nephews of each other and you know it seemed like there were nations and nation states but really there was a royal family. yes that that's that's an interesting parallel and i thought of that also as as i was writing this and you know in that era it was even the case that this sort of european aristocracy very often spoke a different language from the national vernacular that the peasants spoke didn't couldn't even they can even understand the language in which the peasants spoke so yes i think there are some similarities i mean the big difference is that for now this sort of international country of the plutocrats is one into which they haven't been born it's one into which they've risen but something that i worry about today is we are seeing today we're living in a time of unprecedented concentration of wealth at the very very top what happens

as time goes on and that wealth passes through the generations are we going to move into a sort of more aristocratic hereditary elites i think that's quite possible and particularly now when an elite education is so important for success in the world and yet education is such a financial burden on the middle class you know even you know from the time you start going to kindergarten that class divisions starts to shape your life but moving back to the fifteenth century so what what do we do is there going to be a new renaissance or a new enlightenment. well i think what we should do and what i hope we will do is have you know a new progressive era but it does have to be new and we have to people who are worried about this have to come up with some new ideas. we started our

conversation tom by talking about the parallels with the nineteenth century in the industrial revolution and i talked about that a lot with economists in doing the research for my book and some of them would say well you know we should be reassured by those parallels because after all did the industrial revolution turn out to be a good thing and everything settled down and my response to that is to say yes it did but let's think about what it took to get to that settle down period it took two world wars to depressions the long depression of the great depression communist revolution in russia and in china and those i think were actually essential in the political accommodation in north america and western europe so it was incredibly turbulent incredibly violent incredibly costly actually in human life i think we need to buckle our seat belts and start figuring things out that's an extraordinary analysis chrystia freeland

a brilliant book you have written thank you so much for joining us tonight my pleasure it's a pleasure to be with you to see this in other conversations with great minds go to our website conversations with great minds dot com. and that's the way it is tonight priority for summer two thousand and twelve for more information on any of the stories we've covered visit our websites to tom harpur dot com or speech dot org and our two dot com if you missed any of tonight's show you can now watch it in h.d. on hulu at hulu dot com slash the big picture also check out our two you tube channels there are links of thom hartmann dot com also there you can check out all the different ways you can send us your feedback message boards chat room their feedback telephoto along and lots of ways to participate and don't forget democracy begins when you get information from kristi's book and read it it's really get out there and get active tag your students.

thank. you. brooke.